Anybody have any reliable stats on the number of homebrewers in North Ameria? Or someplace to find such. From a business perspective, how large is the market?Be wary of strong drink. It can make you shoot at tax collectors -- and miss. ~~Robert A. Heinlein: The Notebooks of Lazarus Long

There is some information on the web site of the Home Beer and Wine Trade Association that claims between 500,000 and 1,000,000 homebrewers in the US. I don't know how they arrive at these numbers, nor do I have Canadian figures, which would be swelled by the number of brew-on-premise operations where the BOP brews the wort and the customer comes in and pitches the yeast. Moreover, I'm not sure whether someone who brewed an extract batch or got a Mr. Beer kit a couple of Christmases ago counts as an active homebrewer.

Thanks, Bill. I've got an idea for a product that I think might be useful. I'm trying to put together a little preliminary business model to see if it's even worthwhile to spend the time and money for the patent application.Be wary of strong drink. It can make you shoot at tax collectors -- and miss. ~~Robert A. Heinlein: The Notebooks of Lazarus Long

George, Home Brewers will buy anything. Your success is assured. FWIW, patent applications are now taking about 2-3 years to get through the process. They're also relatively easy to get around. My software patent took 2 years to get and that was about 7 years ago.

I was thinking about that $80 provisional individual patent. Just filing the application gives me, I think, 18 months to decide what to do and see if I can make a go of it.

I'd be happy if I could just make enough money to support my brewing habit. Problem is, that it's plastic and the injection molds would cost about $100,000, plus about ten bucks a throw, for a product I'd like to sell for $25. I've got to decide whether I can make that back in a reasonable enough time to satisfy a banker.Be wary of strong drink. It can make you shoot at tax collectors -- and miss. ~~Robert A. Heinlein: The Notebooks of Lazarus Long

You're telling me Dan. That doesn't even include distribution or admin costs. I might be able to do a little better, those are the top estimates I received. I'm trying to use the most pessimistic ones for the model, then be suprised at success, rather than the other way around.Be wary of strong drink. It can make you shoot at tax collectors -- and miss. ~~Robert A. Heinlein: The Notebooks of Lazarus Long

My dad gets injection molding tooling done for about $40,000 a pop. He makes harnesses for snow plows, and the connectors are all custom injection molding. They have thier own press, but they have to outsource for the dies to make any new connectors. He's in Upper Michigan.

Dan, the China connection has put a lot of American mold builders out of business. China can build molds for what we have to pay for the raw steel. This isn't directed towards you Dan, but when it comes to money, patriotism goes out the window. Hey, doesn't this belong in the World Expressions directory?

My friend, our machinist, got his Chinese connections while outsourcing his company's products. The company's very survival was on the line. Their only choice was to go to China or go out of business. My friend eventually was laid off as he had done his job so well. It was a blessing in disguise. He now runs his own machine shop and import company.

Ken, I emailed Paul late last night. Haven't gotten a response yet, but I wouldn't expect one yet, either. I'll let you know.

Like you, my first thought about the Chinese connection was to cringe. I'd rather stay domestic, but if it comes down to a choice between not getting off the ground or outsourcing the mold, I know which way I'd go. I'm just a middle-class guy with 4 kids, a mortgage, car payments and soon-to-be college tuition. Gathering the start-up capital will be my major hurdle. After that, I'm not as concerned about the per unit cost. Besides, wherever I got the tooling work done, I'd most certainly operate it close to home which would provide work for a local company or hire a press operator of my own (probably not as likely, but I can dream). It's too early in the process to make these kinds of decision, anyway, I'm still trying to figure out if there's a market to support it.Be wary of strong drink. It can make you shoot at tax collectors -- and miss. ~~Robert A. Heinlein: The Notebooks of Lazarus Long

How complex is the part? Unless it requires slides, collapsing cores, or some other complex tooling you should be able to find a shop that can do a prototype 'relatively' cheap. Is it possible for you to mold a blank and machine out features that would simplify the tool? That may allow you to get started for less. I'm counting the last 5 minutes as actually working.

Well, let's be generous and assume there are one million people in North America who might buy homebrewing equipment. Now let's say you might be able to convince one percent of them that your $25 product is so indispensable that they would buy it. That's 10,000 units and sales of $250,000.

If the material cost is $10 per unit and the tooling costs are $100,000 (another $10 per unit), that's only $5 per unit potential profit, and you haven't considered other production, advertising and administrative costs. You're not going to reach a very large audience on the online homebrewing discussions, and you would receive a lot of criticism for the self-promotion.

You can easily see why reducing the tooling costs and the option of offshore production are so appealing. Often the margins are razor-thin and make the difference between success and failure.

As an analyst, most manufacturing companies I cover have a gross profit margin of about 40%. If you assume that this would be reasonable for a business plan, you would need to count on 20,000 units to ammortize the $100,000 over. Or if you depreciate it over 7 years, approximately 3,000 units a year. Also that doesn't account for electrical, rent and labor allocated to production costs.

Of course the other way to improve your gross margin would be to raise the price.

That's funny, I just picked up a bottle of Monty Python's Holy Grail Ale ("Tempered over burning witches"), made by The Black Sheep Brewery. I thought it was amusing, but haven't had it yet. I'm not expecting much, but...